Ammon News - US energy prices for home heating fuels have surged as a polar vortex has borne down on the country, reviving volatility in markets left dormant after years of mild winters.

Natural gas prices have risen 4 per cent in the past week and 14 per cent in the past month, with benchmark Henry Hub trading at $3.66 per million British thermal units on Thursday. Contracts surged as high as $4.20/mn btu on Monday.

Heating oil futures have gained 5 per cent in a week, with benchmark New York Harbor contracts trading at about $2.35 a gallon on Thursday.

The onset of winter is historically a time in commodity markets when prices for heating fuels rise. But the northern US may be facing its coldest January in more than a decade after years of warmer winter temperatures, catching some traders in the market off guard. Last year’s winter in the US was the warmest on record, according to the National Centers for Environmental Information.

“The market has been rather complacent as US production was surging and inventories were above normal,” said Phil Flynn, an analyst at Price Futures Group. “But at the same time, the market may have to face a winter challenge that it has not seen in a while.”

About 47 per cent of US households heat their homes with gas, while 40 per cent use electricity, according to the US Census. Heating oil is still used in some parts of the Northeast.

The jump in fuel prices comes as eastern and central parts of the country brace for an “Arctic outbreak” that is set to bring what the National Weather Service has warned will probably be “the coldest air of the season to date and dangerous wind chills”.

Temperatures could drop below zero as far south as the Gulf Coast and Florida, the agency warned, potentially damaging citrus crops.

Financial Times